Suddenly Mary fell in the water
Were not I weary I would have caught her
I watched for a moment and scrambled in
after
Words of disownment were drowned out with
laughter

I awoke from a peaceful sleep and found
my clothes under the table
Aesop used to make me weep but now I'm
part of Mary's fable

Suddenly Mary fell in the water
I found myself married to somebody's
daughter
"Loving," she told me
"Is a question of bravery"
But when she started to hold me
It was closer to slavery
I got up for a bite to eat and found my
clothes inside the icebox
I used to stand on my own two feet but
now I sit when my new wife talks

Suddenly Mary fell in the water
She floated away with the ring that I
bought her
She had convinced me that I was a failure
I burned all my clothing and found a new
tailor
Suddenly Mary (repeat)
Suddenly Mary's fine (repeat)

I think that he is referring to an old trick where someone is skinny dipping and someone has hidden his clothes. As Michial said, it's in the context of a failing/failed marriage. I think the lyrics make an analogy of feeling trapped (hence the 'slavery' reference also in the song) and vulnerable in the marriage, the same as one would feel if they found that they didn't have clothes to put on and get away.